Asia’s top multi-strategy hedge funds post biggest 2026 losses after July AI selloff

Several of Asia's largest multi-strategy hedge funds suffered their biggest monthly losses of the year in July, as a brutal selloff in AI-linked semiconductor stocks across Japan, South Korea, and China eroded gains built up during a stellar first half of 2026.

Platform Funds Tested

Hong Kong-based Pinpoint Asset Management's main multi-strategy fund retreated 9% in July, while Polymer Capital Management, the best-performing Asia multi-strategy fund in the first half with more than $6 billion in assets, lost 6.9%, trimming its year-to-date gains to 11.5%, according to Reuters. Singapore's $9 billion Dymon Asia multi-strategy fund posted a similar loss of 6.5%, narrowing its January-to-July gain to 7.5%.investing

A monthly loss exceeding 5% is notable for these so-called platform funds, which distribute capital across multiple managers employing various strategies — from equities and fixed income to macro and commodities — with the aim of smoothing volatility and maintaining low correlation to market direction.finimize+1

Broader Carnage

The multi-strategy funds nonetheless fared better than the wider industry. Goldman Sachs ↘ 1.38% estimated that Asia's predominant stock-picking hedge funds fell 15.2% in July, which the bank's prime brokerage unit called the worst month for regional stockpickers on record. Bloomberg reported that regional long-short funds gave back 21 percentage points of year-to-date gains after peaking at 40% on July 22.reuters+1

South Korea's benchmark Kospi slumped 22% for the month — its worst decline since the 2008 financial crisis — while Japan's Nikkei 225 fell 8%. The selloff was driven by concerns over AI spending returns and the unwinding of leveraged positions in semiconductor stocks, with Goldman Sachs calling the five-day cumulative de-grossing by hedge funds the largest on record.investing+2

Divergence in Risk Management

Not all funds were caught equally exposed. Singapore-based Arrowpoint Investment Partners, founded by former Millennium Management Asia co-CEO Jonathan Xiong, posted a milder 2.6% loss after reducing fund-level risk ahead of July upon identifying signs of excessive leverage in markets including South Korea and Taiwan. Kings Court Capital's Asia-Pacific fund and Quantedge Capital also generated positive returns by cutting exposure to overheated areas before the rout.finance.yahoo+1

"In market cap terms, this is the biggest unwind we've ever seen," said Vikas Pershad, a portfolio manager for Asian equities at M&G Investments.reuters